Adaptive Learning, Endogenous Inattention, and Changes in Monetary Policy

This paper develops an adaptive learning formulation of an extension to the Ball, Mankiw and Reis (2005) sticky information model that incorporates endogenous inattention. We show that, following an exogenous increase in the policymaker's preferences for price vs. output stability, the learning process can converge to a new equilibrium in which both output and price volatility are lower.

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Year of publication:	2006-06-22
Authors:	Branch, Wiliam ; Carlson, John ; Evans, George W. ; McGough, Bruce
Institutions:	Department of Economics, University of Oregon
Subject:	expectations \| optimal monetary policy \| bounded rationality \| economic stability \| adaptive learning

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Extent:	application/pdf
Series:	University of Oregon Economics Department Working Papers.
Type of publication:	Book / Working Paper
Notes:	1 pages long
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E31 - Price Level; Inflation; Deflation ; D83 - Search, Learning, Information and Knowledge ; D84 - Expectations; Speculations
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005196104